28 December 2018

Nigeria: SEC Dismisses Prosecution Over Multiple Subscription Accounts

The Securities and Exchange Commission (SEC) has dismissed fears of prosecution over investors' multiple subscription accounts, urging Nigeria to take steps towards regularising their multiple subscription accounts in order to derive the benefits of their investments.

Acting Director-General of the SEC, Mary Uduk, while speaking in an interview, said investors that have such irregularities should not entertain any fears of prosecution, noting that the commission is only interested in ensuring investors have the benefits of their investments.

"They are not going to be prosecuted, we just want them to come forward and take back their shares and register them properly with CSCS so that the trading float in the market will increase.

"The forbearance window for shareholders with multiple subscriptions has been extended by another year from the December 31, 2018 deadline previously communicated. "Consequently, we enjoin those who have not come forward for the regularization of shares purchased with multiple identities, to do so."

Uduk also enjoined investors to take advantage of the on-going e-dividend registration in a bid to reduce the unclaimed dividends profile as well as increase liquidity in the capital market and the economy.According to her, the reason for the E-Dividend Mandate Management System is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend. Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market.

It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy. Furthermore, Uduk said: "It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors' addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.

She stated that the E-Dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issuance are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.

The E-Dividend registration exercise started on November 23, 2016. Each successful registration cost N150; however, between that time and March 31, 2018, the Commission underwrote the registration cost for all investors that mandated. It is my pleasure to let us know, that a total of 2.4 million accounts had been mandated.

"May I therefore implore you all to key into the E-Dividend registration exercise by visiting the nearest bank branch or registrar. In addition to migrating to the E-Dividend regime yourselves, kindly tell everybody you know to do same in their best interest.


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